Da Silva v C H Chemicals (Pty) Ltd

The respondent, C H Chemicals (Pty) Ltd, sued its former managing director, Jose Duarte Coelho Da Silva, and two Resinex-related companies after Da Silva resigned and joined the Resinex group, which then entered the South African market in competition with the respondent. While still managing director, Da Silva negotiated with Resinex, accepted an offer to head its South African operations, incorporated competing companies, and during his notice period concluded a transaction involving LLDPE for the benefit of the new business. The respondent alleged that Da Silva breached his fiduciary duties by exploiting several alleged corporate opportunities (including collaboration with Resinex, acquisition of the Plastomark business, and continuation of Dow and DDE distribution contracts) and that the corporate appellants engaged in unlawful competition. The High Court upheld all claims; the matter came on appeal to the Supreme Court of Appeal.

The appeal succeeded in part. All claims were dismissed except those arising from the LLDPE transaction. The first and second appellants were declared liable for damages arising from the LLDPE transaction, with costs orders adjusted accordingly. The issue of quantum and related costs was postponed for later determination.

The case is a leading South African authority on directors’ fiduciary duties and the doctrine of corporate opportunities, particularly clarifying the limits of liability after resignation and the balance between fiduciary obligations and freedom to compete. It provides detailed guidance on when an opportunity or business belongs to the company versus the individual director.